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If you want to achieve success as a financial advisor, master the art of selling to women.
There is little doubt about the significance of this market. A study by Boston Consulting Group concluded, “As wealth management clients, women are both significant and undervalued." The study found that women controlled about $20 trillion of the world's wealth. In North America, women control approximately 33% of assets under management.
Women account for more than 50% of all stock ownership in the U.S. and 48% of estates worth more than $5 million. They also control or influence 67% of household investment decisions.
The science of selling to women
When I was doing research for The Smartest Sales Book You'll Ever Read, I was struck by the lack of credible support for much of the advice given about selling to women.
I found this odd because there is a wealth of well-researched information dealing with the difference between the way men and women process information. The same presentation you may be using to great effect with men is unlikely to produce the same results with women.
Historical context
There are many theories for how these communication differences came about. One study suggests that it has evolutionary roots. If a male wanted to survive, he had two choices: fight or flee.
Confronted with the same circumstances, fighting was often not a viable option for women, according to this theory. It was complicated and cumbersome, because of the need to protect their children. If females had adopted a fight-or-flight response, their chances of survival would have decreased, along with their ability to reproduce. By adopting a “tend-and-befriend” defense, the ensuing female network increased the likelihood of survival for her and her children.
While these theories are useful in understanding generally how men and women process information, they are not universally applicable. Although neuroscientists have concluded there are differences in brain anatomy and physiology between the genders, those differences may not necessarily be hardwired. There is ample evidence that many gender traits are also influenced by upbringing and experience.
The impact of hormones
A hormone called oxytocin reduces stress and promotes social bonding. Men and women have similar levels of this hormone, but oxytocin has a greater effect on women, which may be because women have higher levels of estrogen. The relationship between estrogen and oxytocin is thought to explain why women are less aggressive than men.
Unfortunately for men, the male sex hormone (testosterone) can reduce the level of oxytocin. It can also increase the level of another hormone called vasopressin, which has been shown to enhance aggression.
These hormonal differences may account for the aggressive response by men to stressful situations, compared with the calmer, “tend-and-befriend” reaction of women. It may also be why women are more comfortable sharing their feelings, which causes their oxytocin levels to rise.
Understanding these differences is critical to communicating with women.
Communication differences
Given our hormonal dissimilarities, it’s not surprising that men and women communicate differently. Conversation among women is more personal and focused. Women tend to interrupt less frequently than men. They encourage participation by everyone. Men avoid discussing their personal feelings, talk many topics and seek to dominate the conversation. They do so to establish hierarchy.
A guide prepared by Fidelity Investments characterized the way men communicate as “hierarchical,” “competitive” and “independent.” Women were described as “inclusive,” “collaborative” and attracted to groups.
In general, men view wealth as indicative of success. Women think about it as security.
These profound differences require a tactical shift in the way you deal with female prospects.
If you are a man selling to a woman, you may be predisposed to use the conversation as a vehicle for “educating” her. She, on the other hand, may be using the conversation as a way to assess how trustworthy you are. While these goals are not necessarily mutually exclusive, your tactics may be counterproductive unless you are aware of her goals.
You can’t communicate with someone you don’t understand.
No one solution is right for all interactions between genders. When a man is selling to a woman, I recommend mirroring her behavior as much as possible and avoiding stereotypical conduct associated with male communication patterns. A woman looking for an emotional connection is not going to find it with a man who talks loudly, lectures to her, interrupts her and generally attempts to dominate the conversation in order to establish his alpha-male credentials.
A more effective strategy is to make inquiries that elicit her views on exactly what she needs and wants from you. Repeat back what she has said so she knows you understood her. Don’t interrupt, even if you feel compelled to do so. She needs to understand she can trust you to act in her best interest and that your goal is not just to make a sale. As the Fidelity guide aptly noted: “Women want an advisor who is a team player, not one who is the captain of the ship.”
Women selling to women are likely to find implementing these suggestions easier. Asking questions, sharing feelings and sharing information can be easier for women than men.
Regardless of gender, no one likes to be patronized, lectured to (in the guise of “education”) or trivialized. The impact of these negative impressions is heightened when dealing with women.
Dan Solin is the director of investor advocacy for the BAM Alliance and a wealth advisor with Buckingham Asset Management. He is a New York Times best-selling author of the Smartest series of books. His latest book,The Smartest Sales Book You'll Ever Read, has just been published. He consults with corporations and advisory firms on ways to improve their sales.
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